1. Discuss the differences in production efficiencies among nations that result in the production of a certain type of good.

Some countries, like Brazil and Australia have vast amounts of land and can inexpensively produce land-intensive goods such as wool, wheat, and meat. Because of their well-educated and abundant labor force, countries like Japan can produce low cost labor-intensive goods such as digital cameras, portable CD players, and video game players. Industrial advanced countries, because of their large amounts of capital, can produce inexpensive capital-intensive goods such as automobiles, agricultural equipment, and chemicals.

2. What is the general goal of the WTO?

The WTO was formed in 1994 with the general goal of liberalizing world trade. The WTO is the overseer of several rules of liberalized trade and the agency responsible for resolving any disputes. They are also suppose to meet periodically to consider further liberalization of trade.

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